EU public Country-by-Country Reporting
On December 1, 2021 the EU public Country-by-Country Reporting (CbCR) Directive was published in the EU Official Journal and entered into force. The objective of the Directive is to create corporate transparency and to enhance public scrutiny. The Directive should be transposed into national legislation by June 22, 2023. Member States are currently working on legislation to implement the Directive. Based on this draft legislation, differences have been detected between Member States (e.g. implementation date).
In summary, the Directive entails the following, reference is also made to the following link and this flyer.
EUR 750 million revenue threshold and EU presence
The Directive applies to EU Ultimate Parent Undertakings (UPUs) or Standalone Undertakings with a consolidated net turnover / net turnover exceeding EUR 750 million for each of the last two consecutive financial years. Non-EU UPUs with a consolidated net turnover exceeding EUR 750 million for each of the last two consecutive financial years and with an EU presence that includes either medium-sized or large subsidiaries or branches that meet stipulated criteria also fall under the Public CbC reporting obligations.
The information to be disclosed must be reported on an aggregated basis: per Member State, per each non-cooperative and grey list jurisdiction, and aggregated for all other jurisdictions. The OECD CbC Report data can be used for this. The following information must be reported (and is similar to the OECD CbC report):
Profit(loss) before income tax
Income tax paid (on cash basis)
Income tax accrued – current year
Number of employees
Additional descriptive information.
Effective date and filing deadline
The provisions in the Netherlands will most likely apply to financial years starting on or after June 22, 2024. If the fiscal year corresponds to the calendar year, this would mean that the first reporting year for multinationals will be FY2025. Member States may introduce the provisions earlier (please note that Romania currently intends to do so).The reporting deadline is within 12 months of the balance sheet date of the financial year for which the report is prepared. Member States are free to set the reporting deadline within this 12-month period, which means it can also be for a shorter period.
The information has to be publicly accessible, free of charge and in an electronic reporting format which is machine-readable via the (local) company website.
Failure to comply with these new reporting obligations may result in penalties and possibly directors' liability.
We recommend that you take steps now to determine the in-scope EU jurisdictions and where exemptions may apply, to verify specific local regulations and to determine the filing strategy. We would be pleased to help you draft the report and analyze the picture presented in the report. Please let us know if you would like to receive more information about this matter. Meijburg & Co would be happy to discuss public CbCR with you. Feel free to contact one of our transfer pricing specialists.